How to Write The Industry Section of a Business Plan
Writing a Business Plan: Section 2
When writing a business plan, the Industry section is best organized as two parts: an overview of the industry and a summary of your business's position within the overall industry.
Before writing this section of the business plan, use these questions to focus your research:
- What is the size of your industry?
- What sectors does this industry include?
- Who are the major players in this industry?
- What are the markets and customers for this industry?
- What are the industry's estimated sales this year? Last year? The year before?
- What national and economic trends have affected this industry and how?
- What national and economic trends might affect it in the future and how?
- What is the long-term outlook for this industry?
- What products or services will your business be selling?
- What is your Unique Selling Proposition? (What is it about your business that makes it unique and sets it apart from competitors?)
- What are the barriers to entry in your industry?
- How will you overcome these barriers?
- Who are your competitors?
- What is the market share of your competitors?
- What is your business's competitive advantage (i.e., your market niche or estimated market share)?
- What is your target market?
- How are you protecting your product or process (i.e., patents, copyrights, trademarks, franchise rights that you either hold or plan to acquire)?
Once you have all this information, you'll write this section of the business plan in the form of several short paragraphs. (Remember, each of these paragraphs is a summary, not a detailed point-by-point explanation.) Use appropriate headings for each paragraph.
Finding Information on Your Industry
But where do you find the information that you need for writing the Industry Overview section of your business plan?
United States Research
In the United States, you may want to start your research by reviewing information from the U.S. Census Bureau, Industry Statistics Portal. This site provides data for selected industries separated into categories using the North American Industry Classification System (NAICS). The Bureau of Labor Statistics also offers a large selection of information grouped by NAICS industry.
There are also other sources of information—some free and some paid sources—including IBIS World, Select USA, and the U.S. the Department of Commerce Bureau of Economic Analysis.
When you're writing a business plan and looking for information on Canadian industries, Industry Canada is your logical first stop. Their Find Statistics by Industry page lets you see key economic indicators for different sectors of the Canadian economy, access industry profiles, and analysis and research small businesses in Canada generally.
Another primary source for industry and economic information that you can easily access online when you're writing a business plan is Statistics Canada. From this homepage you can find a wealth of free statistical information; use this page, to search for Statistics Canada publications back to 1980.
There are also provincial statistics websites where you'll be able to find more economic, social, and demographic statistics relating to your industry and the business environment.
The Canada Business Service Centres located in each province also offer excellent collections of resources online, and telephone and email information services. You'll find a list of links to the Canada Business Service Centre in each province in my Provincial Programs and Services Resources.
The business sections of national newspapers and business magazines will also be helpful; these often carry features on the past and future business trends.
And don't forget your local sources of business information when you're researching your business plans, such as your Economic Development Centre, Chamber of Commerce, or Women's Enterprise Centre, or the business section of the local library.
Doing Business Plan Research
If your business is related to manufacturing when you're writing a business plan begin by determining the NAICS of your particular industry, and the sector and sub-sector if applicable. It will make it easier for you to find statistical information relating to your industry. If your business is a service, begin with Industry Canada's service industry profiles.
Refer to the list of questions earlier in this article on how to write a business plan as a research guide. Whenever you find a piece of information that you want:
- Check its date and determine whether or not the information is current enough to be valid;
- Write down the date and source of the information, as you'll need to cite your information sources in the business plan.
When you're writing a business plan, you want your research information to be as up-to-date as possible. After all, there's no point in starting a business if you don't want it to succeed.